According to USA Today, quoting a Post made by Goug Staglin on Stars and Stripes Online, this unclassified e-mail was sent by the Force Protection/Antiterrorism office to Army employees at the Kleber Kaserne Army installation in Kaiserslautern, a German city where more than 50,000 Americans live:
Ladies and Gentleman,I can see where an exercise like that would get some attention, hopefully word got out before someone had a heart attack or took matters into their own hands..
The individuals you see in full PPE and the individuals you see in "Arabic attire" armed with AK-47's, pistols and IEDs are role players and/or USAG-K reaction force personnel who are conducting TRAINING. Please stop calling the German Police, Military Police and hiding in your buildings. You will see these people walking around the outside of your offices and near the gates the remainder of the day and I assure you they are only training. Thank you for your vigilance, time and understanding. (Originally Posted in Stars and Stripes Online by Doug Stanglin)
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China's Dagong downgrades U.S. credit rating to A+
The United States has lost its double-A credit rating with Dagong Global Credit Rating Co., Ltd., the first domestic rating agency in China, due to its new round of quantitative easing policy.
Dagong Global on Tuesday downgraded the local and foreign currency long-term sovereign credit rating of the U.S. by one level to A+ from previous AA with "negative" outlook.China is not the entire world, so the downgrade from China may have a minimal effect on our credit ratiing elsewhere. On the other hand, China is one of the few countries that can afford to continue loaning the United States Money to finance our Annual Operational Deficiets, this year those deficiets will run somewhere close to 1.5 Trillion Dollars. Hard to say exactly since the Outgoing Congress didn't think it was politically advisable to come up with a budget.
The Chinese rating agency said the downgrade reflected the U.S.'s deteriorating debt repayment capability and drastic decline of the U.S. government's intention of debt repayment.
"The serious defects in the U.S. economy will lead to long-term recession and fundamentally lower the national solvency," Dagong said in a report.
Feed back from the rest of the world hasn't been positive either these quotes come from Der Spiegel and make the German point of view pretty clear.
Interview With German Finance Minister Schäuble
'The US Has Lived on Borrowed Money for Too Long'
Schäuble: The German export successes are not the result of some sort of currency manipulation, but of the increased competitiveness of companies. The American growth model, on the other hand, is in a deep crisis. The United States lived on borrowed money for too long, inflating its financial sector unnecessarily and neglecting its small and mid-sized industrial companies. There are many reasons for America's problems, but they don't include German export surpluses.
SPIEGEL: The US government sees it differently. It wants to see German exports to the United States curtailed in the future once they reach a certain threshold. Will you give in to the pressure?
Schäuble: The proposal is not acceptable for Germany under any circumstances. If we were to introduce such measures, we would be restricting international competition. But for years we, together with the Americans, have believed that world trade needs to be opened up further. We should stick to that approach and, for example, press ahead with the Doha round to promote world trade. This would stimulate global growth far more effectively than a bilateral agreement on quotas.
SPIEGEL: Last week, the US Federal Reserve Bank decided to flood the economy with $600 billion in new money. Will this stimulate the economy as hoped?
Schäuble: I seriously doubt that it makes sense to pump unlimited amounts of money into the markets. There is no lack of liquidity in the US economy, which is why I don't recognize the economic argument behind this measure.
US to Bully Germany on Trade Surplus at the G-20
By Christian Reiermann
The US thinks it knows who is to blame for its struggling economy: Germany and other countries with a trade surplus. Washington wants to see new rules that would punish such imbalances, but Germany says it shouldn't be blamed for having more competitive companies than the US.
There is an ironclad rule in Berlin politics: The greater the concern the more nervous the rhetoric................
..............■Key emerging economies, most notably Brazil and Indonesia, are imposing restrictions on the movement of capital, which could disrupt the global money cycle.
■In desperation over the grim economic situation, the administration of US President Barack Obama is embarking on a diplomatic offensive intended to pillory countries with chronic trade surpluses. This puts China, Japan and Germany in the line of fire.
Well. I suppose we don't have to worry about Germany's opinion to much, right now they're in the middle of trying to rescue Greece, Spain, Portugal, Iceland and Ireland from the conesquences of having more government than they could afford. They're in no postion to loan us money at the moment anyway. Schäuble brings up a good point, how long can the United States finance it's Social Programs with other peoples money? I'll reserve comment on the Bullying Story, except to say it seems to highlight what many see as this Administration's policies of Punishing Success and Wealth Redristibution.
So what about some Countries that can loan us some cash? Shall we start with Brazil? This from Rueters:
Brazil's Meirelles: Fed's latest move on G20 agenda
Fed's QE policy causing 'distortions' and 'problems'.
CHICAGO, Nov 4 (Reuters) - The head of Brazil's central bank said on Thursday that the U.S. Federal Reserve's latest plan to lower domestic borrowing costs and jumpstart the ailing economy would cause further "distortions" in world markets and complicate his country's efforts to stem the rise of its currency
Russia echoes China, says U.S. should consult G20
President Dmitry Medvedev will take part in the summit, where conflict is brewing over the U.S. Federal Reserve's latest allocation of $600 billion to buy Treasury bonds -- money that investors are likely to redirect into emerging markets in search of higher returns, potentially fuelling new asset bubbles.
"Russia's President (Dmitry Medvedev) will insist .... that such actions are taken with preliminary consultations with other members of (the Group of 20 countries)," said Russian G20 negotiator Arkady Dvorkovich.
If I had the time I could find more negitive reaction from around the World.. Russia, China and Brazil are said to be starting discussions again about ending the Dollar's Status as the Worlds Reseve Reserve Currency. Indonesia, while worried about the possibility of currancy wars, also see it likely the various banks benefiting from Quantive Easing II won't loan the money to Americans and American Busineses but to smaller economies like their own that pay higher dividends. If so it shoots down Bernanke's Stated Objectives, but would fall in line with parts of the Presidents Support of the United Nations Global Climate Control Agenda, part of which mandates supporting developing nations, by countries like the US.
I was jusy about ready to publish this when I took another look at something, Call it an unlikely senaio, it's one I'm not ready to accept.
The one thing I know for a fact is we are going to see three dollar and rising gasoline again in the very near future, well before Christmas. Worse, many people living in the colder parts of the country are going to have a long very cold winter. An extra thousand or two thousand bucks, maybe more for heating oil this season will be more than they can afford.
Global tensions are on the rise
Commentary: An unfortunate needle points to war
Dilma Rousseff, Brazil’s president-elect, warned, “The last time there was a competitive devaluation of currencies it ended up where it did, in the second World War.”
Too bad that most people that took Econ 001 slept through it. I imagine not too many people understand the concept of fractional reserves. And the Fed is not subject to this necessary discipline. Last Tuesday we put in a few people that might, just might, understand. Watch, and fire those that turn back. If we have any chance, it's a 50 year war. And we will loose many battles.
ReplyDeletePat Galbraith
http://online.wsj.com/article/SB10001424052748703523604575605582255947588.html
ReplyDelete"The U.S. and other countries have long been seeking a stronger Chinese currency in order to narrow the trade gap, with limited success. But the trade data did come after China's central bank on Wednesday set the yuan's central parity rate—a reference for daily trading—at a fresh high against the dollar of 6.6450. The yuan has now risen 2.9% against the U.S. dollar since China's June pledge to allow greater exchange-rate flexibility."
BTW, Brazil's economy is doing quite nicely these days. Lots of trade agreements with China.
ReplyDeletehttp://www.mcclatchydc.com/2010/10/07/101720/report-china-brazil-are-fueling.html
The moral to the story....it's complicated.
Grumpy, you've convinced me. I think we should allow the "tax cut for the rich-top 2%" expire, in order to save the 3 trillion over the next 10 years. We'll also need a hatchet job on next year's spending and I think our new reps will do that. We also need to reel in the "Mae twins" and make the banks abide by the same rules.
ReplyDeleteBud, for this at the moment I'd be happy if chaneged the way we deal with the larger banks. The Fed literally gives them money for nothing. For example, if an existing bank goes down, the Fed will give it to a larger bank fro 1 or 2 cents on the dollar.. Loan it the money to buy it with at leass than 1% and guareentee the loan
ReplyDeleteWhy Germany is unhappy with U.S. economic efforts on its own behalf? Answer: Competition on the field of exports that they believe worked very well for them.
ReplyDeletehttp://www.dw-world.de/dw/article/0,,6211134,00.html?maca=en-tagesschau_englisch-335-rdf-mp
"Increased consumption, investments and demand for German exports are fuelling the recovery, and should lead to reduced levels of unemployment and state borrowing, the experts said. However, they also cautioned that a repeat of Germany's so-called Economic Miracle in the post-war era was not on the cards.
The council, often referred to as the Five Wise Men of the Economy (in fact, one is a woman), was set up in 1963 to advise the government on economic policy.
he chairman of the expert panel, Wolfgang Franz, told Chancellor Merkel that her government could support the fragile growth by issuing stricter regulations on the global financial sector and continuing to consolidate German overspending. He also issued two warnings to governments, employers, and trade unions - advising against "rash cuts in taxes" and "excessive increases in wages."
Tax cuts were a major campaign platform of Merkel's pro-business coalition partners, the Liberals (FDP), and the party - which is struggling in the polls - is keen that they are introduced sooner rather than later. Economic Minister Rainer Bruederle, a member of the FDP, told German public television on Wednesday that his party would be patient before cutting taxes, but the cuts would come.
"Not today, but soon. Because if the economy really does grow as predicted, then - after implementing the measures to balance the budget that we have made priority number one - there might be a bit of lee-way for some slight cuts in the middle-bracket." Bruederle said.
"But, as our coalition keeps saying, we must reduce the budget deficit as a short-term priority, and then think about taxation in the medium term."
Bruederle said that the government might be in a position to start the process by 2012 - especially in light of the panel's prediction that Germany might dip below the prescribed EU budget deficit limit of 3 percent of Gross Domestic Product in 2011."
Grumpy: Might be worth looking at the debt reduction panel's recommendations. If the panel agrees, it will go to Congress for a vote.
ReplyDeleteOne report finds that unlikely.
"The possible pain is so widespread that it is unlikely Bowles and Simpson will get the nine other Democrats and seven other Republicans who serve as members of their panel to sign on to the plan as it is. If 14 of the 18 total commissioners agree, then the plan gets sent to Congress for a vote in December."
http://www.csmonitor.com/USA/2010/1110/Who-will-be-upset-by-panel-s-proposal-on-national-debt-Nearly-everyone
One recommendation is to raise retirement age to 69. While raising retirement two years caused rioting in France, do you think it would cause any reaction here?